The Greatest Increase in Wealth Inequality in American History Occurred During the Obama Administration

Source: David Stockman Email

I just received an email from David Stockman's newsletter, and it included the upper graph taken from Edward N. Wolff's "Has Middle Class Wealth Recovered."  There are a number of ways to look at the question of rich versus poor; the above graph uses one, the relative shares of the top one percent and the bottom  ninety percent. (Disclaimer: I'm one of the nine percent in neither category.)  

The gap narrows in the 1970s, but observe  the lower graph, which is of real wage growth.  Real wages stopped growing in 1973.  The reason the wealth inequality declines during the 1970s in the upper graph is that the stock market was falling in the 1970s. Hence, the decline in wealth inequality during the 1970s is a measure of joint pain and only of theoretical importance.  The solution put forward by Richard M. Nixon in 1971 was pumping money into the economy via the Federal Reserve Bank. 

The pure paper money system established in 1971  helped the wealthy but not the majority.  Notice also that the third-most-rapid increase in wealth inequality, according to the upper graph, occurred during the Reagan administration. It began to solidify during the Bush I years, 1988-1992; it remained constant during the Clinton years; then, following the tech bubble bust of 2001 it escalated during the Bush II years, which were the years of the second-greatest gains in wealth inequality.  However, Bush and Reagan were pikers compared to Obama, who oversaw the most massive wealth transfers, which followed the 2008 crisis via the expansion of the Federal Reserve's balance sheet, the creation of massive amounts of reserve IOUs called Federal Reserve bank credit, quantitative easing, and so on. 

The lower graph tells a slightly different story.  Since the early 1970s, when the Fed was given a free hand to redistribute wealth via the creation of paper money, real wages have stagnated.  The GDP has continued to grow, although the meaning of GDP is questionable because it includes government spending and make-work projects that do not create value.  There is little difference between Democrats and Republicans.

How the Democratic Party Has Caused Upstate New Yorkers to Flee

Upstate New Yorkers flee in large numbers.  According  to Jeff Platsky of the Binghamton Press and Sun-Bulletin. (h/t Glenda McGee),  84 people leave Broome County each month, 39 leave Chemung County, and 29 leave Tioga County.   

Platsky observes that every single county along Route 17 from Orange County to Pennsylvania has declined in population over the past decade; moreover, in upstate New York overall, 42 of 50 counties lost population.  Route 17 runs along the state's southern rim, known as the Southern Tier, which borders Pennsylvania. 

The reason is simple: lack of jobs. Yet, the Democratic Party has prevented  fracking in the Marcellus basin, which would have created thousands of jobs.  Instead, the jobs went to Pennsylvania.  Meanwhile, New York has the worst income inequality in the country--and the highest electricity rates.

Much of the protest against fracking has been misguided. For instance, Youtube  carries several videos of people who are able to ignite their tap water. The video makers claim that the problem was caused by nearby fracking. 

I asked a colleague at Brooklyn College about the videos.  The colleague, Constantin Cranganu, is a geologist who has written books on fracking. He told me that the water was catching on fire before the fracking and that fracking cannot possibly cause this, in part because the fracking occurs at a depth of over a mile while the water well is 100 or 200 feet deep.  Thousands of tons of rock separate the well from the fracking drill. 

Yet, meshuggener Democrats show this video to each other and proclaim that they wear the mantle of the one settled science, courtesy of Youtube, Bill Maher, and Al Gore. 

Writing in Forbes in 2015, Jude Clemente notes that New York's natural gas consumption had risen by more than a third, to 60% of its entire energy generation, but the state cut its natural gas production in the interest of ideological purity. The anti-fracking proponents are rich Democrats who work in tax-subsidized businesses: academia, government, law, and health care.  They have no qualms about forcing blue collar laborers into permanent unemployment. 

The handful of upstate counties that have gained population in New York mostly have been the ones surrounding Albany, seat of New York's bloated state government, or college towns. 

Platsky notes that there have been plenty of bureaucratically inspired, state-subsidized development schemes, all of which have failed.  

The exit of manufacturers like IBM and GE in the 1980s has not been followed by the kind of innovation that occurs in a free market economy. New York's high tax rates and totalitarian regulatory regime have inhibited entrepreneurship.  Retirees have little incentive to stay because of the cold climate and high taxes. 

FA Hayek on How Obama's War on Income Inequality Will Nazify America

I'm rereading The Road to Serfdom.  Accessibly written, Hayek lays out many of his most important ideas. According to Bruce Caldwell's introduction to the Definitive Edition, the book has sold 300,000 copies, which is rare for a book written for an academic audience. Hayek comments on income inequality, an issue that the Democrats and their media have adopted this year.  

I do not understand this obsession because the greatest gains to the poor have occurred in countries whose laws are objective, that is, that follow the rule of law and that permit entrepreneurs to innovate.  Such innovation results in increasing real wages, but it allows even greater gains to the entrepreneurs. The result is that in free market economies the poor become better off because of income inequality; the greater the entrepreneurial success, the greater the gains to the poor.

I wonder if the  aim of the advocates of income redistribution is really to enhance state control, further reduce freedom,  and improve the position of the inept rich, crony capitalists, at the expense of the poor.  College professors do well when the inept rich do well because crony capitalism typically benefits universities.   Show me a proposal for regulation, and I will show you a Rockefeller, Ochs-Sulzberger, Bundy, or Bush angling for the fruits of government violence.  I will also show you a clique of academics cheering on the redistributive policy and the inadvertent gains to the inept rich in the interest of additional government subsidies to universities.

In order to effect wealth equality, government must violently compel its victims to give up their wealth to benefit the state's beneficiaries.  Government violence results in declining national wealth, as failed socialist economies such as North Korea's, France's, India's, and the United States' show.  As Winston Churchill put it, "The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."  Of course, the effect of government violence is never really equality.  Government cronies inevitably do well as the families of Kim Il-sung, George W. Bush, Barack Obama, and John D. Rockefeller illustrate.

Capitalism benefits the poor the most. Life expectancy in early modern Britain was between 25 and 40 years old, and in revolutionary America it was about 35. The gains in life expectancy came about because of improvements in sanitation and public health, and secondarily because of the invention of drugs. Market capitalism made both possible.  For example, the wealth needed to construct sanitary housing did not exist in the precapitalist economy.  The capitalist increases in the real hourly wage that continued in the US until the expansion of government spending in the 1960s, when the US transitioned from a capitalist to a socialist state, meant that the poor working person could improve his lot through saving.  Today, many working Americans cannot save because of the high costs of home ownership, commodities, and taxation, all due to government and Federal Reserve policy.

In The Road to Serfdom Hayek discusses how, in the absence of public resistance,  socialism leads to totalitarianism. The requirements of central planning, economic regulation, and wealth redistribution directly contradict the requirements of the rule of law and democracy.  Wealth redistribution is inherently coercive.  The advocacy of income equality is the advocacy of violence.

With respect to government programs to enforce wealth equality, Hayek draws parallels to Nazis (p. 117):

A necessary and only apparently paradoxical result...is that formal equality before the law is in conflict with, and in fact incompatible with, any activity of the government deliberately aiming at material or substantive equality of different people, and that any policy aiming directly at a substantive ideal of distribution justice must lead to the destruction of the Rule of Law. To produce the same result for different people, it is necessary to treat them differently.  To give different people the same objective opportunities  is not to give them the same subjective chance.  It cannot be denied that the Rule of Law produces economic inequality--all that can be claimed for it is that this inequality is not designed to affect particular people in a particular way.  It is very significant and characteristic that socialists (and Nazis) have always protested against "merely" formal justice, that they have always objected to a law which had no views on how well off particular people ought to be, and that they have always demanded a "socialization of the law," attacked the independence of judges, and at the same time given their support to all such movements as the Freirechtsschule which undermined the Rule of Law.

Hayek, who came from Austria, adds this footnote:

It is therefore not altogether false, when the legal theorist of National Socialism, Carl Schmitt, opposes to the liberal Rechstaat (i.e., the Rule of Law), the National Socialist ideal of the gerechte Staat) ("the just state")--only that the sort of justice which is opposed to formal justice necessarily implies discrimination between persons. [Editor Bruce Caldwell adds the following: German jurist Carl Schmitt (1888-1985) was a critic of liberal parliamentarianism and defender of the authoritarian state. In the 1930s he attempted to reconcile his views with those of the Nazis, offering legal justifications of their takeover of the government and defending the Nuremberg Laws that excluded Jews from public and social life. Though he lost favor with the Nazis by 1936, outside of Germany he was often viewed as the legal theorist of National Socialism.  Hayek also refers to the Freirechtsschule, which is the German term for "legal realism," a doctrine that holds that instinct rather than rule-following is the actual basis of judicial interpretation of the law."--Ed.]

The New Dark Age

There is no one date that can be identified as to when Rome fell and the Dark Ages began. Alaric and the Visigoths sacked Rome in 410 and Geiseric and the Vandals sacked it in 455, but it wasn't until hundreds of years later that the Gauls, ruled by the conquering Franks, realized that they were no longer speaking Latin but rather a new language derived from Latin. Eastern Rome or Constantinople did not fall to Sultan Mehmed and the Ottomans until 1455. Whatever date you choose to assign, there was a period of several hundred years during late antiquity when literacy rates were lower than previously, population had been decimated because of a series of plagues between the sixth and eighth centuries and few records were kept. I would argue that this decline was necessary for the rebirth of European civilization that occurred in the Renaissance, the Enlightenment and in Europe's most backward quarter at the time, Great Britain, from the 1500s to 1800s.

Compared to the period from 1776 to 1971, we have entered into an incipient dark age. The dark age is not necessarily identifiable through declines in literacy, although recent studies announced in the newspapers indicate that students' achievement has been in the decline. Nor do I predict the outbreak of plagues, although there have been such predictions. Rather, excessive monetary creation and the new money's transfer to Wall Street and real estate interests have slowed wage growth and innovation. We are in a dark age compared to where we would have been without the Federal Reserve Bank , the current monetary system and income taxes.

In other words, the Federal Reserve Bank's control of the money supply has displaced technological and market innovation with financial and real estate speculation and government. Until Richard M. Nixon finally abolished the gold standard in 1971 the real hourly wage grew at 2% per year. Since then, the real hourly wage has not grown at all. The difference between the wage profiles with compounded 2% annual growth and 0% annual growth over 40 years is around 100%. American workers today are earning 1/2 of what they would have been earning had the gold standard been in place and savings and investment resources allocated efficiently.

No one can know what the economy would have looked like in the absence of the Fed and the income tax, but there is no question that there would have been considerably more rapid and more extensive rates of innovation, just as there had been in the late 19th and early 20th centuries before the Fed was established. There would be less opportunity to work in low-paying retail jobs and less stock market appreciation. But there would have been opportunities to work in technologies that are unknown to us and unknowable because the individuals who would have otherwise invented the technologies became stock traders or lawyers instead of inventors. Likely there would be cures to diseases that are today unknown, methods of transportation that are unknown and conveniences that are unknown. Compared to where we would have been without the Fed, we are living in a dark age.

The Dark Ages perpetuated the Roman class system, replacing Roman Emperors, Senators and Equestrians with barbarian tribal chieftains like Clovis as kings and various feudal titles like earl, duke and count. In the American case, the Fed creates a three-class system: those with early access to Fed reserves, to include the banking system, the military-industrial complex, Wall Street and government; a middle class that mostly works in the military-industrial complex with some access to Fed reserves; and a lumpen proletariat without much access, about a third of the population. The three-class system replaces the egalitarian democracy of laissez faire capitalism, which was characterized by fast paced competition and more fluid class structures than today.

The new dark age is perpetuated by the creation of gilds or interest groups that resist change. Public employee unions demand the privileges to which they have become accustomed, as do their "betters" on Wall Street. The lowest extreme of the lumpen proletariat is content with section 8 housing, welfare and Medicaid, and the right not to work.

The new system is not yet so stable as the manorial and feudalist system of the earlier Dark Ages. The trifurcation of society will see stagnant living standards that may eventually decline. Medical innovation and then the standards of health care will be reduced, along with declines in the quality of diet, resulting in stagnant or perhaps increasing rates of mortality.

America's state-controlled media will attribute stagnation and decline to capitalism or to foreigners. They will protect the aristocrats of Wall Street, the military-industrial complex and government at all costs.

It remains unclear whether American wages will continue along the current stagnant path of the past 40 years or will begin to decline as the nation's economy becomes less important on the global scene. In order to regain a growth position (in real wages) there will need to be considerable upheaval in the American economy. It seems most likely that the wealth transfers to Wall Street, the military industrial complex and government will not abate unless there is an overt crisis.

Comment on the Claim that Increasing Income Tax Will Improve Average Earnings and Reduce Income Inequality

Those who claim that increasing income taxes will improve real hourly earnings have to explain the fact that prior to 1913 there was no income tax but real hourly earnings were increasing as much as 20 times faster than they have increased since 1971, when a significant income tax was in place. I tabulate some rough estimates of average real wage growth pre 1913 and post 1971. Between 1860 and 1890 real wages were growing at a 1-2% clip or so. Post 1971 they have been growing at about 0.1% per year. But there was no income tax for most of the 1860 to 1913 period. In contrast, under the income tax, real wages have been stagnant.

See comparison here.

Differences this big have been ignored in the popular debate about wage inequality. Something is seriously amiss here. Comments, anyone?

Why Did the New Deal Make the Rich Richer and the Poor Poorer?

Howard S. Katz has an excellent blog this week concerning what he terms the liberty-benevolence split. Katz poses an interesting question to New York Times editor Abe Rosenthal:

"Explain this to me Mr. Rosenthal. In the great days of America, the gap between rich and poor kept getting narrower. An originally poor man would invent a new product, make a million dollars and raise the standard of living of the American people...Explain, Mr. Rosenthal. Before the New Deal the gap between rich and poor shrank. But today the gap between rich and poor grows. How could this possibly be happening?"

The answer, of course, is the fallacious "liberty-benevolence split" between libertarians of left and right. Freedom of contract and free markets are the greatest protection that the poor have. In contrast, government programs like the Federal Reserve Bank have impoverished the poor. Programs like urban renewal have created slums and excluded minorities from "white" neighborhoods. Regulation has prevented working class entrepreneurs from inventing new products and moving up the ladder. In contrast, the feudalistic "aristocracy" that Progressivism and the New Deal establishes, the corporate elite who accomplish nothing but have fancy credentials and degrees and state-bestowed authority, but are almost inevitably incompetent, have come to dominate our society. In particular, the Times has cheered the allocation of massive amounts of credit to incompetent Wall Street and banking interests who have paid themselves large sums at public expense (because the credit is ultimately private property that the Fed has expropriated) and so impoverished the average productive worker. It is not enough for the Times, Wall Street and its army of quack economists that inflation has exploited the public for decades. They cheer ever more aggressively for direct bailouts so that incompetent bankers can lend ever more money to hedge fund managers. And note that there is little difference between "conservative" Progressives of the "right" and social democratic Progressives of the "left".

Howard's blog is excellent. Read it here.

Income Inequality Effects of Estate Tax

The controversy surrounding the estate tax has emphasized moralistic arguments. The first is that proponents claim that eliminating the estate tax will increase wealth inequality. The second is that opponents argue that the estate tax is coercive and deprives earners of their right to property. A corollary of the first is that the estate tax enhances government revenue. A corollary of the second is that the estate tax taxes wealth that already has been taxed via capital gains and income tax.

But what if the estate tax increases wealth inequality?

The claim that the estate tax reduces wealth inequality overlooks a critical point: not all estates are taxed. In particular, wealth placed in family trusts is not taxed. Since the ultra-wealthy tend to place their wealth in family trusts, the wealth-equalizing effects of the estate are uncertain.

There is surely a statistical argument that if you eliminate wealth of the top 2-0.5 percentiles of wealth earners, then there is more wealth equality. But wealth in the top 2-0.5% of wage earners is not what might be called deviant levels of wealth. The top 0.5% of wealth is in the 3-4 million dollar range, which is not enough to escape at least the threat of having to earn a living. Someone who aims to live a luxurious lifestyle would need to have much more than that. Thus, the variance of wealth distribution is a deceptive measure. It is only with respect to the top .1% and above that income inequality has significant effects on one's prospects, and it is precisely this group that establishes family trusts.

As I have previously blogged, a prime example is the Ochs Sulzbergers, owners of the New York Times, who have repeatedly advocated estate taxes for everyone else, but have dodged them for themselves for the past four or five generations via a family trust. To be fair, an estate tax would tax family trusts first, say 70% of a pro-rata share of each beneficiary who dies, before lesser wealth is taxed. I have never heard of a Congressional proposal to tax family trusts. Hence, Congress has never really cared about wealth inequality where it really counts. Just the opposite.

That is, there is a more subtle question. The onerous taxation of families in the top 2 - 0.5% percentile while exemption of families above that level from estate tax via family trusts may actually increase wealth inequality. This cannot be proven nor disproven empirically.

It takes some firms several generations to grow into Fortune-level concerns. Examples include Johnson and Johnson and IBM. If there are fewer very large firms than there would be without an estate tax, shares of the very large firms trade at higher prices than they would under conditions without the estate tax because there is less competition. The estate tax may accentuate the wealth of the very wealthy by nipping competition in the bud. If there would be a greater number of large firms in a free and fair market than there are today, then profit levels of the large firms would be lower. Stock prices of the large firms will also be lower. There will be more firms, more economic diversity, and as a result, more equality.

There would be more equality without an estate tax because the wealthiest, like the Ochs Sulzbergers, would not be as wealthy, and because the ranks of the very wealthy would be increased by a greater number of competitors. The larger number of competitors would reduce the wealth of the very wealthy and would increase their number. Thus, wealth inequality would be reduced. Moreover, the incentive to invest long term would increase, stimulating more Americans to achieve high degrees of wealth. The end result would be that income equality would be increased. This could have large effects on wages if increased competition increases demand for workers.

In other words, the estate tax may be increasing inequality by reducing the number of firms that become large over several generations and increasing the wealth of the Ochs Sulzbergers and other ultra-wealthy families. This freezing of American capitalism leads to a more permanent form of income inequality than would a competitive economy where families are struggling to compete with large firms.

As a result, not only can one not say with certainty that the estate tax reduces wealth inequality, but one can be fairly sure that the estate tax INCREASES the MOST IMPORTANT forms of social stratification whereby an ultra-elite that includes the Ochs Sulzbergers differentiates itself from the rest of society not because of merit but because of government and law.

One response might be to tax family trusts, and if there is to be an estate tax at all it should be applied to family trusts first because the oldest, least innovative firms are held by the oldest money that is most likely to be in trusts.

The most innovative firms that are most likely to create new technologies are held by families in the top 2-.5 percentiles. Thus, the estate tax may create wealth inequality in yet another way. By freezing out innovation and supporting the upper echelons in outmoded technologies, new business ideas that create new sources of wealth have been inhibited by the estate tax. The result is a country that is poorer because there is less innovation and economic growth and more wealth inequality. The effects of the estate tax likely exceed any mere statistical variance or Gini coefficient and may be unobservable because no one knows how badly the estate tax has harmed innovation.

Do not look for these ideas in the New York Times.

Spreading Shortages Due to Greenspan-Bernanke Federal Reserve Policy--Woodrow Wilson Turns in His Grave

My wife just returned from a Food Emporium supermarket on the upper west side of Manhattan. She tried to buy light bulbs but all the light bulbs had been sold except for two packs in which one light bulb was broken each. Likewise, her best friend just returned from her house in Hawaii and said that there is rice rationing there. As well, my wife has repeatedly been unable to purchase spa and beauty products at our health club in Ulster County, New York and has been told by the sales people that there are backlogs on orders across the board. Suppliers have not been shipping. This is the first time that we have seen a shortage of light bulbs in the supermarket.

These shortages are directly attributable to Fed policy, specifically of the Greenspan-Bernanke Fed. Across the board shortages and price inflation result from malinvestment attributable to excessively low interest rates that fund Wall Street and the commercial banking industry. Thus, the public has subsidized Wall Street to build houses that no one can pay for. The inflationary consequences of the Greenspan-Bernanke policy over the next 30 years will cause many headaches. Although a shortage of spa products or light bulbs are inconvenient, and I can hedge by buying commodities indexes and the like, the Greenspan-Bernanke Fed's three decade-long Christmas for Wall Street, hedge funds and real estate developers has resulted in the death of children in the third world and significantly lower incomes for the average American worker.

It distresses me that double talk--e.g., blaming the results of the Fed's decades-long inflationary stance on third world trade--that characterized discussions about the inflationary recession of the 1970s is again appearing, this time among "conservatives". Social-democratic conservatives seem eager to claim that the interventionist Fed policies of the last three Republican and Clinton administrations have not caused across-the-board inflation in commodity prices, flat wages of workers, wealth transfers to speculators, and child starvation in the third world. They are the friends of big government.

The only solution to flat earnings, reduced wages, inflation and shortages is to get government out of our money supply. That means establishing the kind of gold standard in which Woodrow Wilson believed when he established the Federal Reserve in the first place in 1913. Wilson had voted as a "Gold Democrat" for the New Democratic (Gold) Party in 1896. He did not anticipate that the New Deal coupled with the social democratic (Roosevelt-Rockefeller-Nixon-Bush) wing of the Republican Party would declare against the gold standard. And who would have thought that following Richard ("We are all Keynesians now") Nixon, so-called conservatives have become bigger apologists for government control, regulation and debasement of our money supply than their left-wing social democratic colleagues.

Toward the Democratization of Capital

Wealth can only be created by work or invention. It cannot be created by monetary expansion. In recent years there has been an increasing interest in expansion of the money supply in order to increase stock market and real estate prices. The reason for the Federal Reserve Bank's interest in easing is that there is political pressure from wealthy interest groups on the Fed. The result of the excessive easing has been that those who hold equities have become wealthier relative to those who do not. As well, property, commodity and other asset holders have benefitted.

There are two effects. One is increasing income inequality and the other is a reduction in innovation and hard work. There are persistent shortages of workers in certain fields such as auto technicians and construction crafts. At the same time, innovation has been limited to a few narrow fields where capitalists feel comfortable financing new technology, notably computer, biotech and telecommunications. Innovation in alternative fields has slowed.

Progressive-liberals have advocated taxing the rich to equalize incomes. There are several problems with this. First, taxation is subject to exceptions that result in continuation of the pre-existing biases. The current income tax system is proof enough that progressive taxation does not work, and those at the high end of the system are least likely to actually pay. I sometimes wonder where the progressive-liberals who advocate progressive income taxation and the inheritance tax have been for the past 80 years. Have the Rockefellers paid any inheritance tax?

Second, taxation may inadvertently deter innovation. It may be true that many billionaires have profited from Fed easing and it is likely that there has been a crowding out effect whereby those in the riskiest and most innovative businesses have been crowded out by financiers, large businesses and technology firms who have monopolized access to credit. Imposing taxes on the wealthiest Americans may redistribute income or wealth from those who have benefitted from federal policy but may also deter those who have to overcome the massive disincentives that federal policy places on risk taking. The result may be even less productive innovation in the economy.

Third, some, including myself, object to taxation on philosophical grounds. It is compulsory and therefore creates an atmosphere of distrust.

Rather than an income tax on the wealthy, why not provide a tax credit to people who invest in assets like stocks and real estate? The tax credit could involve a sliding scale that maxes out at the top 5 or 10 percent of the income distribution and is indexed for CPI increases. Anyone who invests in assets would do so on a dollar for dollar tax reduced basis. That way, the middle class could more easily participate in the inflationary boondoggle and there need not be any compulsion involved in doing so.

Compassionate Socialism Causes Child Starvation in India

Despite much of the ballyhoo about Indian privatization, India remains a primarily socialist country, and the socialism has resulted in massive child hunger. The Associated Press reports via Yahoo! that 46 percent of Indian children are underweight. The article attributes this to rural versus urban living, but the real problem is the crowding out effect of above-market wages to public sector employees. After six decades of compassionate socialism in India, India's children are hungry.

According to Answers.com, "India followed a primarily socialist economic path between 1947 and 1980." After 1980, India began to privatize some industry, and the nation's economy began to grow. By 2003, India had increased the percentage of private sector employment to below 35%. According to a chart located here 180 million Indian workers work for the public sector while only 80 million work for the private sector. However, this actually reflects a trend toward the private sector. India's recent growth is due to the transfer of employment to the private sector.

The problem of an employment crowding out effect is serious. Writing for the World Bank, Glinskaya and Lokshin find that public sector wage premiums range between 62 and 102 percent over the private-formal sector and between 164 percent and 259 percent over the informal-casual sector and that "India has one of the largest differentials between wages of public workers and workers in the formal private sector" in the world.

The high wages in the public sector, which still dominates the economy, reduces demand for employment. The result is that those who have primary sector jobs are better off, while those who do not go hungry.

Six decades of compassionate socialism has resulted in starvation in India. Unlike New York, Indians cannot flee to Colorado or Nevada. They are stuck in a backward, socialist society.